Tuesday, December 4, 2012

HP’s Accounting Claims Are Seen as Cover for Bad Deals - (www.bloomberg.com) Hewlett-Packard Co.’s (HPQ) claims
of financial improprieties at Autonomy Corp. have accounting experts
questioning whether the allegations are an attempt to divert attention from yet
another bad acquisition.
Hewlett-Packard said yesterday it recorded an $8.8 billion writedown related to
its purchase last year of Autonomy, the U.K. software maker. More than $5
billion of that impairment charge was the result of accounting practices at
Autonomy, Hewlett-Packard said in a statement. About $200 million of Autonomy’s
revenue had been recorded prematurely or improperly, according to
Hewlett-Packard’s general counsel. “How
does that translate into a $5 billion write-off?” said Lynn E. Turner, former
chief accountant of the U.S. Securities and Exchange Commission and a managing
director at LitiNomics Inc., an economic and forensic consulting firm. “The big
issue isn’t the fraud they’re talking about. The big issue is that HP has made
acquisitions that have turned out to be a disaster.”

Drought No Obstacle to Record Income for U.S. Farms - (www.bloomberg.com) Even after the worst drought in a half century shriveled crops from Ohio
to Nebraska, U.S. farmers are having their most-profitable year ever because of
record- high prices and insurance claims. Farmer income probably will jump 6.9
percent to $144 billion, exceeding the government’s August estimate of $139.3
billion, said Neil Harl, an economist at Iowa State University. Parched fields
that drove corn, soybean and wheat futures as much as 68 percent higher since
mid-June mean insurance payouts may more than double to $28 billion, according
to Doane Advisory Services Co., a farm and food-company researcher in St.
Louis.

Meat Firms Face Hit to Plump Profits - (online.wsj.com) Most big U.S.
meat companies have posted solid profits this year, though some have
experienced an earnings slowdown as consumers balk at higher prices for steak
and other meat products. Now the companies are just starting to face a new
challenge: a severe U.S. drought that has driven up the cost of grains they use
to fatten cattle, hogs and chickens. Investors looking for clues into how the
higher costs will affect the meat giants will get a taste this week, when Tyson Foods Inc. and Hormel Foods Corp. report
quarterly results.

Los Angeles Set to Rival Chicago With Highest Sales Levy -
(www.bloomberg.com) Los Angeles shoppers
looking for just the right satin blindfold or Whip Me stockings at Agent
Provocateur’s lingerie boutique on Melrose Avenue may soon pay as much tax as
customers at the company’s Gold Coast store in Chicago, and more than at the one on Madison
Avenue. The City Council, which faced $1.6 billion in deficits over the past
four years, voted 11-4 today to ask residents to boost the local sales tax 0.5 percentage point, bringing
the total levy -- local and state -- to 9.5 percent. That would tie Los Angeles
with Chicago for the highest rate of the 10 largest U.S. cities. New York City is 8.875 percent. “Our approach to dealing with our budget
shortfalls has been to cut,” said Edward Johnson, a spokesman for City Council
President Herb Wesson, who backed the sales tax proposal. “If we continue to
cut, we will drastically affect the services that we deliver to our citizens.”

CaixaBank SA, Spain’s third-biggest bank,
took about 20 billion euros in central bank funding, according to the
Barcelona-based company’s
accounts. Banco Sabadell SA, a Catalan lender that became Spain’s fifth-biggest after a
string of acquisitions, has borrowed about 27 billion euros. The region’s
President Artur Mas called early elections for Nov. 25 in a gambit that may
trigger a drive for independence and risks stranding a new Catalan state
outside the European Union as well as severing ties to Spain. The region’s
banks, like other Spanish lenders, tapped the ECB’s low-cost funding when Spain’s
economic crisis shut them out of debt markets.